by Goda Thangada -

MICROCAPITAL STORY: Global Partnerships Microfinance Fund 2008 Invests $1.75m in South American MFIs FODEMI, Fundacion D-MIRO and Prisma

The Global Partnerships Microfinance Fund 2008 (GP MFF 2008), a member of the Global Partnerships family of funds, reported three investments in April 2009 to the CGAP Microfinance Dealbook, the monthly report on microfinance market transactions. Equadorian microfinance institutions (MFIs) FODEMI and Fundacion D-MIRO each received USD 500,000 in debt while Peruvian MFI Asociacion Benefica PRISMA received USD 750,000 in debt. MicroCapital previously reported on the launch of the GP MFF 2008 in November 2008.

by Sally Levy -

MICROCAPITAL STORY: International Finance Corporation (IFC) Invests over $514m in Micro Small and Medium Enterprise (MSME) Initiatives During 2008

The International Finance Corporation (IFC), a member of the World Bank Group, provides investment and advisory services to developing countries. Created in 1956, the IFC seeks to foster sustainable economic growth by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Within its Global Financial Markets sector, the IFC supports microfinance in order to promote successful and sustainable economies in low and middle income countries. The IFC provides direct and indirect investment and advisory services to the microfinance sector. Its focus is on creating and supporting commercially viable microfinance institutions (MFIs) that can attract private capital thereby responding to unmet demand for micro loans. Furthermore it seeks to demonstrate the business case for commercial microfinance and also promote it as an asset class to private institutional investors. During 2008 the IFC invested USD 513.8 million in micro small and medium enterprise (MSME) initiatives and provided USD 840,000 worth of advisory services. Following is detailed information about IFCs activities in the microfinance arena.

by Zoran Stanisljevic -

PAPER WRAP-UP: Will the Bottom of the Pyramid Hit Bottom? The Effects of the Global Credit Crisis on the Microfinance Sector, by the United States Agency for International Development (USAID)

By Barbara Magnoni and Olga Jennifer Powers of EA Consultants, published by the United States Agency for International Development (USAID), March 2009, microReport number 150, 54 pages, available at: 

http://collab2.cgap.org//gm/document-1.9.34169/11Will%20the%20Bottom%20of%20the%20Pyramid%20Hit%20Bottom_The%20Effects%20of%20the%20Global%20Credit%20Crisis%20on%20the%20Microfinance%20Sector.pdf

The produced report by USAID provides an assessment on the impact of the financial crisis on the microfinance sector.  The paper provides a framework for assessing the impact of the crisis on the microfinance sector by analyzing the effects on both the liabilities side (access to finance, cost of funding, financial risk) and the asset side (portfolio growth, portfolio risk, portfolio quality) of an MFI’s (Microfinance Institutions) balance sheet in order to determine the extent that MFIs may have been impacted.

by Jaclyn Berfond -

MICROFINANCE PAPER WRAP-UP: MIX and Intellecap Present the Asia Microfinance Analysis and Benchmarking Report 2008

Produced by Microfinance Information Exchange, Inc. (MIX) and Intellecap, March 2009, 20 pages, available at: http://www.themix.org/sites/default/files/2008%20Asia%20Microfinance%20Analysis%20and%20Benchmarking%20Report.pdf

The “Asia Microfinance Analysis and Benchmarking Report 2008” analyzes the evolution of the microfinance industry in South Asia and East Asia and the Pacific (EAP), with a focus on outreach and scale, funding sources, and financial performance in fiscal year (FY) 2007.

by Ryan Hogarth -

MICROCAPITAL STORY: ‘MySME News’, Backed by the European Commission’s Asian Invest Programme, Brings Business Information to Microfinance Borrowers in India and Nepal

A news source called “MySME News” has been launched in the Indian states of Karnataka and West Bengal, and Nepal, with the goal of reporting tailored business news via newsletters, mobile messaging, and community radio to microfinance customers and small and medium enterprise owners. MySME News is the initiative of three organizations: Internews Europe, a Paris-based company that funds community media projects around the world; Plural India, a New Delhi-based non-profit with a focus on reducing information asymmetries in the low-income sector; and Mahiti Infotech Pvt. Ltd., a social enterprise (for-profit, with all proceeds funneled back into the mission) that provides low-cost information technology to civil society groups. Shivendra Sharma, executive director of Plural India and former executive director of microfinance support network, PlaNet Finance, explained that the main source of information among the low-income sector is word of mouth, “Most people get it from 10 houses this side and 10 on that side.” Mahiti’s executive director, Sreekanth S. Rmeshaiah, said that the information gap is an impediment to smart investment choices: “The main idea of the project is to offer the poor a chance to make intelligent decisions through information.” Business information is also important to foster competition among microfinance enterprises (MFIs), as borrowers become more aware of their options.

by Ryan Hogarth -

MICROCAPITAL STORY: The Microcredit Summit Campaign Announced that Microcredit Reached More than 106 Million of the World’s Poorest in 2007

The Microcredit Summit Campaign revealed that more than 106 million of the world’s poorest received a microloan in 2007. The finding is a product of the Microcredit Summit Campaign’s annual survey of microfinance institutions (MFIs) around the world. The 106 million are made up of individuals who, at the time of receiving their first loan, were either at the bottom half of those below their nation´s poverty line, or living on less than USD 1 per day (adjusted for purchasing power parity).

by Lori Curtis -

MICROCAPITAL STORY: Bill and Melinda Gates Provide US$700,000 to Microcredit Summit Campaign’s “Movement Above US$1 Per Day Threshold” Project

The Bill and Melinda Gates Foundation has donated USD 700 thousand in the form of a grant to the Microcredit Summit Campaign‘s (MSC) project entitled “Movement Above the US One Dollar Per Day Threshold“. The funds will be used to form expert panels who will develop credible methodologies for determining the number of microfinance clients who have crossed the USD 1 a day threshold between 1990 and the current year. The funds will also be used to research and produce studies based on the recommendations of these panels. A Bangladesh Expert Panel has already convened, an India Expert Panel is currently being formed, and an Ethiopia Expert Panel is being planned for 2009. While this is the first time the Bill and Melinda Gates Foundation has provided funding to the Microcredit Summit Campaign, it has previously provided funding to the RESULTS Educational Fund, MSC’s founding organization.

by Jeffrey Erfe -

PIONEERS IN MICROFINANCE: Six Pioneers in Latin America: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico

Microcapital has identified the following six microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology. While not all of these pioneers hail from Latin America, all have been instrumental to the development of microfinance in that region. These pioneers are: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico. Below are short descriptons of the contributions of each:

by Melissa Duscha -

PAPER WRAP-UP: Microfinance for Water, Sanitation and Hygiene: An Introduction

This document was produced by the Netherlands Water Partnership (NWP) with contributing editors Catarina Fonseca, Marieke Adank, Deirdre Casella and Martine Jeths, in cooperation with the International Water and Sanitation Center (IRC) and contributing editors Peter van der Linde and Bianca Dijkshoorn. Originally published in October 2007, this 33-page document is available here.

This paper was published as an introduction to the use of microfinance services in developing sustainable infrastructure to provide drinking water, sanitation and hygiene services to poor communities in developing countries. Water supply and sanitation activities are not traditionally targeted by microfinance institutions because they are not seen as income-generating businesses. Recently, more and more microfinance institutions argue that sustainable businesses can be established in water supply and sanitation projects.

by Melissa Duscha -

PAPER WRAP-UP: Benchmarking Asian Microfinance 2006

Written by Scott Gaul and Hindi Tazi of the Microfinance Information Exchange (MIX), based on 2006 benchmark data collected by MIX from 194 Asian microfinance institutions, this publication was released in March 2006 as a 20-page document available here.

The Asian microfinance sector served over 35 million active borrowers with USD 6.97 billion in loans in 2006. While it represents only one third of global borrowers, Asian microfinance serves two thirds of total microloan clients. Asian MFIs also achieved scale in savings with over 47 million voluntary depositors, three-fourths of global microfinance savings clients.

by the MicroCapital Team -

Rating Fund Posts Seven New Microfinance Reports

The following institutions have recently had their rating reports added to The Microfinance Rating and Assessment Fund’s (Rating Fund’s) list of rating reports:

  • Agency for Finance Kosovo, Microfinanza Rating, March 2007
  • Buusaa Gonofaa Ethiopia, Planet Rating, July 2007
  • CCA Cameroon, Microfinanza Rating, May 2007
  • CEP Vietnam, Planet Rating, August 2007
  • Credit Cambodia, Planet Rating, August 2007
  • People’s Forum India, CRISIL, September 2007
  • Seilanithih Cambodia, CRISIL, September 2007

The Rating Fund was founded in May 2001 by the Inter-American Development Bank (IDB) and the Consultative Group to Assist the Poor (CGAP). The European Union subsequently joined the Rating Fund in January 2005.